The purpose of this assignment is for you to demonstrate your ability to analyze (make judgement / good / bad / magnifying glass - detective of sorts!) financial statements. We have talked about Spin Master (a lot!) and we have an idea as to how well they're doing. Now we're going

to look at one of their competitors, Mattel. You will analyze Mattel and then you will compare Spin Master to Mattel.

Mattel's Financial Statements https://investors.mattel.com/static-files/0411d949-17af-4960-aefe-181088ec192a December 31. December 31. 2020 2019 (In thousands, except share data) ASSETS Current Assets Cash and equivalents 762,181 5 630,028 Accounts receivable, net of allowances for credit losses of $15.9 million and $18.5 million in 2020 and 2019, respectively 1,033,966 936.359 Inventories 514,673 495,504 Prepaid expenses and other current assets 172,070 186.083 Total current assets 2,482,890 2,247,974 Noncurrent Assets Property, plant, and equipment, net 473.794 550,139 Right-of-use assets, net 291,601 303,187 Goodwill 1,393.834 1,390,714 Other noncurrent assets 878,970 833,212 Total Assets $ 5,521,089 S 5,325,226 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Short-term borrowings S 969 5 Accounts payable 495.363 459,357 Accrued liabilities 831,922 769,513 Income taxes payable 27,125 48,037 Total current liabilities 1,355,379 1,276,907 Noncurrent Liabilities Long-term debt 2,854,664 2,846,751 Noncurrent lease liabilities 249.353 270,853 Other noncurrent liabilities 465,350 439.001 Total noncurrent liabilities 3,569.367 3,556.605 Commitments and Contingencies (See Note 12) Stockholders Equity Common stock $1.00 par value, 1.0 billion shares authorized; 441.4 million shares issued 441,369 441,369 Additional paid-in capital 1,842,680 1,825,569 Treasury stock at cost: 93.2 million shares and 94.6 million shares in 2020 and 2019, respectively (2,282,939) (2,318,921) Retained carnings 1,539,809 1,413,181 Accumulated other comprehensive loss (944,576) (869.484) Total stockholders' equity 596,343 491,714 Total Liabilities and Stockholders' Equity 5,521.089 5,325,226MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Year Ended December 31. December 31. December 31, 2020 2019 2018 In thousands, except per share amounts Net Sales 4,583,660 S 4,504,571 $ 4,514,810 Cost of sales 2,340,066 2,523,792 2,716,127 Gross Profit 2,243,594 1,980,779 1,798,683 Advertising and promotion expenses 516,803 551,517 524,288 Other selling and administrative expenses 1,345,906 1,390,022 1,508.744 Operating Income (Loss) 380,885 39,240 (234,349) Interest expense 198,332 201,044 181,886 Interest (income) (3,945) (6,166) (6.463) Other non-operating expense, net 2,692 1,879 5.107 Income (Loss) Before Income Taxes 183,806 (157,517) (414.879) Provision for income taxes 68,649 55,224 116,196 Income (loss) from equity method investments 11,471 (771) (2.224) Net Income (Loss) S 126,628 S (213.512) S (533.299) Net Income (Loss) Per Common Share - Basic 0.36 S (0.62) (1.55) Weighted-average number of common shares 347,463 346,127 345.012 Net Income (Loss) Per Common Share - Diluted 0.36 (0.62) (1.55) Weighted-average number of common and potential common shares 349,116 346,127 345.012A C D E F G H K 1 Spin Master Corp Spin Master Corp 2 Balance Sheet Income Statement 3 As of Dec 31, Years ended Dec 31 4 (Millions of $) (Millions of $) 5 6 2020 2019 $ Change % Change 2020 2019 $ Change % Change 7 Assets Revenue $1,570.60 $1,582.60 -$12.00 -0.76% 8 Cash $320.60 $115.30 $205.30 178% Cost of Sales $842.70 $796.60 $46.10 5.79% A/R $338.60 $427.70 -$89.10 -21% Gross Profit $727.90 $786.00 -$58.10 -7.39% 10 Inventory $102.00 $185.30 -$83.30 -45% 11 Other Current Assets $28.10 $32.40 -$4.30 -13% Expenses 12 Selling, marketing etc. $368.00 $395.40 -$27.40 -6.93% 13 Long term Assets $552.80 $495.70 $57.10 12% Admin $264.00 $247.90 $16.10 6.49% 14 Other $50.40 $78.40 -$28.00 -35.71% 15 Total Assets $1,342.10 $1,256.40 $85.70 7% Total Expenses $682.40 $721.70 -$39.30 -5.45% 16 17 Liabilities Net Income $45.50 $64.30 -$18.80 -29.24% 18 A/P $314.40 $345.60 -$31.20 -9% 19 Other current liabilities $91.00 $53.40 $37.60 70% Gross Profit % 46.35% 49.67% -3.32% 20 21 Long term Liabilities $93.80 $97.00 -$3.20 -3% 22 Total Liab $499.20 $496.00 $3.20 1% 23 24 Total Equity $842.90 $760.80 $82.10 11% 25 Total L&E $1,342.10 $1,256.80 $85.30 7%A B C D E F G H J K L M N 1 Mattel Inc. Mattel Inc. 2 Balance Sheet Income Statement 3 December 31, 20xx Year Ended December 31, 20xx 4 5 2020 2019 $ Change % Change 2020 2019 $ Change % Change 6 7 Assets Sales $ 4,583,660 $4,504,571 $ 79,089 1.76% 8 Cash 762,181 $ 630,028 $ 132,153 20.98% Cost of Sales $ 2,340,066 $2,523,792 -$183,726 -7.28% g A/R 1,033,966 $ 936,359 $ 97,607 10.42% Gross Profit $ 2,243,594 $1,980,779 $262,815 13.27% 10 Inventory S 514,673 $ 495,504 S 19,169 3.87% 11 Prepaids 172,070 $ 186,083 -S 14,013 -7.53% Expenses 12 Total Current Assets $ 2,482,890 $2,247,974 $ 234,916 10.45% Advertising $ 516,803 $ 551,517 -$ 34,714 -6.29% 13 Other selling and admin $ 1,345,906 $1,390,022 -$ 44,116 -3.17% 14 Noncurrent Assets $ 3,038,199 $3,077,252 -$ 39,053 -1.27% Other Expenses $ 254,257 $ 252,752 $ 1,505 0.60% 15 Total Expenses $ 2,116,966 $2,194,291 -$ 77,325 -3.52% 16 Total Assets $ 5,521,089 $5,325,226 $ 195,863 3.68% 17 Net Income $ 126,628 -$ 213,512 $340,140 -159.31% 18 Liabilities 19 Current Liabilities $ 1,355,379 $1,276,907 $ 78,472 6.15% 20 Noncurrent Liabilities $ 3,569,367 $3,556,605 12,762 0.36% 21 Total Liabilities $ 4,924,746 $4,833,512 91,234 1.89% 22 23 Total Equity $ 596,343 $ 491,714 $ 104,629 21.28% 24 25 Liabilities + Equity $ 5,521,089 $5,325,226 $ 195,863 3.68% 26 bal? SA1 JX A B C D E F G Spin Master Mattel 2020 2019 2020 2019 4 Gross Profit % 46.35% 49.67% 48.95% 43.97% 5 6 Profit Margin 2.90% 4.06% 2.76% -4.74% 7 8 Current Ratio 1.947 1.907 g 10 Days sales in inventory 44 days 85 days 11 12 Collection Period 62 days 86 days 13 14 Asset Turnover 1.17 1.26 0.83 0.85 15 16 Return on assets 3.40% 5.10% 17 18 Debt to assets 0.372 0.395 19 20 Others? (up to you) 21 ?? Share price?? 22 We've done these.Purpose of report - to compare these two public toy companies and conclude which is in a better financial position. Description / summary of companies - what they do, how they're similar, how they're different. (just a few sentences) page) Income statement analysis i. Year to year trends / movement ii. Discuss profitability iii. Ability of assets to generate sales and / or income Balance sheet analysis iv. Year to year trends / movement V. Ability to collect a/r vi. How quickly inventory is sold vii. Liquidity - ability to pay short term debt viii. Solvency - overall debt levels Conclusion / Recommendations (% of a page??) Overall, which company do you believe is in a better position? Refer to 3 points from above to justify your decision